From traditional innovation to green innovation: How an occurrence of natural disasters influences sustainable development?

With the high incidence of extreme events, it is important to examine how the occurrence of natural disasters influences long‐term sustainable development. We give evidence from the changing process of innovation. Using data from OECD countries from 1985 to 2018, we conclude that environmental threats from the occurrence of natural disasters drive countries to pay more attention to sustainable development and promote the change of innovation type from traditional to green innovation. Moreover, for different types of natural disasters, volcanic activities, landslides, and floods show a positive influence, while epidemics dampen it. Based on the sub‐sample analysis, this impact is more pronounced in countries with high levels of economic development, oil exports and right‐wing parties in power. Furthermore, renewable energy consumption acts as a positive moderator, while the moderating effects of government efficiency, corruption and globalization are inhibiting. Our paper provides new insights into natural disaster economics and sustainable development.